Budget Resolutions

Matt Western Excerpts

Wednesday 30th October 2024 Commons Chamber

[Matt Western (Warwick and Leamington) (Lab)]

It is a pleasure to follow the right hon. Member for East Antrim (Sammy Wilson). I hope that in a few years’ time I will be joining him in celebrating growth rates that exceed the target objective.

What a tour de force by the new Chancellor! If only we had had a general election back in the summer and autumn of 2022. There has never been a more important Budget in recent years. After more than a decade of decay, this Budget must herald a decade of renewal. As the previous Labour Government did from 1997 to 2010, this Government must rebuild our country by founding a stronger, more diverse and more balanced economy. As the Chancellor has spelled out, we will do so by investing in our country, growing the economy and attracting private investment. Only then will we be able to restore the public services that the public need and expect.

This Budget sits in stark contrast to the 14 years of failure we have just suffered. It takes us beyond the absolute poverty, the waiting lists in our hospitals for surgery and cancer treatment, the decay in our crumbling schools, the teacher retention crisis, and an economy that has been virtually stagnant, boasting terrible productivity and income inequality. Those are the dreadful metrics of the last Government. The Institute for Fiscal Studies says that UK economic activity is 36% lower than it would have been if it had continued to grow in line with the 1997 to 2008 trend. That is a lower level than the eurozone or the United States, and when measured in terms of productivity, the latest 10-year average of growth in potential GDP per worker is zero, the second lowest level in the past 150 years. It is an economy still reeling from the events of Truss’s kamikaze Budget that sent mortgages soaring and prices skyrocketing.

Turning to inequality, the UK now has the ninth most unequal incomes in the OECD. Wealth inequality is even more glaring, with the top fifth of the country owning 63% of its wealth, while the bottom fifth hold only 0.5%. That does not just impact the amount of money in people’s pockets: it impacts the economy, too. That is why I believe we must address the imbalance of regressive flat taxes. Council tax must be addressed in the future, and I am glad that the Chancellor has closed tax loopholes and rebalanced the burden of payments, placing it on those who can afford it.

At the same time, this Budget will ensure that hard work pays off by raising the minimum wage. I welcome this—it is striking that many states in the US already pay a higher relative minimum wage than we in the UK do. Hard-pressed households facing the cost of living crisis will also welcome today’s Budget. The fact that we have frozen fuel duty is important, as is not having any increase in income tax, personal national insurance or VAT, as well as the penny off the pint. Those measures will all be welcomed by constituents of mine in Warwick and Leamington.

However, it is through investment that we can grow and rebalance our economy. Strikingly, 14 years of the Conservatives’ economic policies have led to our having the lowest level of public and private investment in any G7 economy. That is why I am proud to be standing on the Government side of the House discussing this Labour Budget, because we understand the synergy between investing in people and investing in the economy. We have already put £7 billion into a sovereign wealth fund, we have set up GB Energy, and we will be establishing Skills England to ensure we have the skills for the next decade. The investment summit a few weeks ago announced £63 billion—an extraordinary achievement. That investment is desperately needed, as was pointed out by Gus O’Donnell, Jim O’Neill, Mariana Mazzucato and Mark Carney. They argue the case for loosening the fiscal rules, stating that

“The current fiscal framework has helped to drive this short term thinking and created an inbuilt bias against investment”.

That point is also supported by the International Monetary Fund.

For years, economists have been calling for a radical shake-up of our economy: we need to shift from a consumption-driven economy to an investment-led one. As such, I welcome the Chancellor’s announcement of support for vital sectors, such as the energy transition and the automotive industry, through the advanced manufacturing plan. The opportunities are huge—that is why the Industrial Strategy Council is so important—so the support announced for green hydrogen, gigafactories, the life sciences and the aerospace sector, as well as the £2 billion promised for electric vehicles in the UK, are so important.

We need investment in our schools, our infrastructure and our NHS. I am particularly pleased to see the additional investment going into our NHS, because we can only become wealthy as a nation if we are healthy as a nation. If we do not address our NHS, we will worsen people’s lives, but this will also have a significant impact on our economy. In 2023, the number of people economically inactive because of long-term sickness rose to over 2.5 million.

I would love to talk about productivity, Madam Deputy Speaker, but perhaps I will do it another time. However, a London School of Economics report last year found that UK productivity is lower than that of France, Germany and the United States. That is why we need investment, and why we need to address the flexible labour laws in this country that have led or contributed to lower than average investment.

I am conscious of time, but I welcome all the measures that my right hon. Friend the Chancellor has announced, particularly on addressing the issue of business rates, which is so important for our town centres up and down the country. I welcome the investment in local government —the additional moneys for potholes, for example—but also the support for families, carers and children with SEND.

This Budget is about stability, certainty and credibility, and about investing in our economy, which is so important because, above all, we need to fix the foundations of our economy. The Chancellor has set out the plan to deliver that change, as was promised to the British people, and I commend the choices she has made.

[Nigel Farage (Clacton) (Reform)]

I think we have to give credit to the Chancellor for a Budget that, in political presentation, was very clever. The SNP has had an absolutely rotten day, and the decision to put money into potholes was clever. The fuel duty freeze is very welcome, especially for those living in rural parts of our country. But for me, the big one is of course the 1p off a pint off draught beer. I have worked out that it will save me over £1 a week, so I am particularly thrilled about that.

I sat listening to the numbers thinking that this Budget is economically illiterate. I do not know who is doing the sums—perhaps it is the right hon. Member for Hackney North and Stoke Newington (Ms Abbott)—but the sums do not work. The markets now agree with me, because just in the last couple of hours we have seen a very substantial spike in gilt yields. We are not yet quite back to the mini-Budget of 2022, but clearly people are saying that this is not going to work. Even more concerning, I suppose, is that the new head of the Office for Value for Money, David Goldstone, served for many years on the board of HS2, which I would suggest is the very opposite of value for money.

[Matt Western]

On a point of order, Madam Deputy Speaker.

[Madam Deputy Speaker (Judith Cummins)]

I hope this point of order will be relevant. Can you confirm that it is relevant?

[Matt Western]

It is relevant, Madam Deputy Speaker. The hon. Gentleman mentioned my right hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott), but had he warned her that he would be mentioning her in the Chamber?

[Madam Deputy Speaker]

I thank the hon. Member for the point of order. However, that is not a point of order; it is a courtesy of the House.

--- Later in debate ---

[Nigel Farage]

I have had plenty of jobs—well, apart from being in the European Parliament, which doesn’t really count, obviously.

What is dismal about this Budget is the growth forecast. If the ambition of our Chancellor is that in four years’ time growth should be 1.5%, that is very bad news for everybody, particularly because it takes no account of the rise in population that will happen through legal immigration. It basically means a rise of 0%. Nobody has even mentioned the fact that gross domestic product per capita—wealth per capita—has been falling consistently nearly every quarter for the past two years. The bigger our population becomes the poorer we are becoming, and we must wake up to that reality.

The big picture is that we are in decline. We are getting poorer. There is no £22 billion black hole—that is nonsense. It is £2.7 trillion. Our debt repayments are £90 billion a year, and from all the figures I have seen today, that will be worse in five years’ time than it is today. We need a complete change of culture. We need to start saying that success is a good thing, and making money is a great thing. People becoming rich is something we should encourage. We have to change our culture of work. There is this idea, “Oh yes, work from home, do a four-day week, get your work-life balance right”—well actually, why do we not say to young people that hard work is a good thing? Hard work is the only way that anybody succeeds individually, and the only way that we will have a chance as a country to turn any of this around.

[Matt Western]

rose—

[Nigel Farage]

No, please sit down—honestly, you’ve had a go.

We are in much deeper trouble than anybody on either Front Bench dares to admit. That is a reality we should all face. We have a Labour party that could not define what a woman is or what a working person is, and after today I am pretty convinced that it cannot define what economic growth is.